UBS analyst Joshua Spector said the proposed merger of equals between Olin Corp. and Huntsman Corp. appears driven primarily by vertical integration and cost-saving opportunities rather than expansion into new end markets. The companies expect to achieve $300 million in annual cost savings by the end of the third year following the merger, with an additional $100 million opportunity available after the expiration of an Olin supply contract in 2031. UBS estimated that capitalizing the initial $300 million in annual savings at roughly six times could generate about $8 per share of value, rising to approximately $11 per share if the full $400 million of savings is realized. The projected synergies include roughly $75 million from procurement and raw-material savings, $75 million from operational efficiencies, and $150 million from reductions in selling, general and administrative expenses. Under the terms of the agreement, Huntsman shareholders would receive 0.5476 Olin shares for each Huntsman share they own, with the combined company owned approximately 54.5% by Olin shareholders and 45.5% by Huntsman shareholders.
Huntsman CorporationMerger with Olin expected to generate $300-400M annual cost savings, creating shareholder value.
Olin CorporationMerger with Huntsman expected to generate $300-400M annual cost savings, creating shareholder value.